Earl F. Childress
OCEANEERING INTERNATIONALAbout Earl F. Childress
Senior Vice President and Chief Commercial Officer at Oceaneering International (OII). Joined OII in 2020 after senior roles at Teledyne; currently responsible for global commercial strategy and business development across energy segments . Company performance during his tenure has improved: 2024 revenue $2.7B (+10% YoY), Adjusted EBITDA $347M (+20%), net income $147M (+51%), and 3-year TSR of 142% (2022–2024 performance unit disclosure) . OII reported six consecutive years of growth and repurchased 825,427 shares ($20M) in 2024, with year-end share price rising to $26.08 from $21.28 in 2023 .
Note: Age and education not disclosed in available filings.
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Oceaneering International (OII) | SVP, Business Development; later SVP & Chief Commercial Officer | 2020–Present | Leads worldwide business development for energy-related segments; appointed to succeed outgoing SVP in 2020 . |
| Teledyne Technologies | Group VP/GM, Teledyne Seismic & Teledyne RD Instruments | 2016–2020 | P&L leadership across marine instrumentation businesses . |
| Teledyne Technologies | Group EVP, Sales & Marketing, Marine Instrumentation | 2015–2016 | Drove commercial strategy across marine instrumentation . |
| Multiple oceanographic instrumentation manufacturers | Sales & management roles | Pre-2002 | Built domain expertise and customer relationships in marine/oceanographic markets . |
External Roles
- Not disclosed in available filings.
Fixed Compensation
| Metric | 2023 | 2024 |
|---|---|---|
| Base Salary ($) | 378,525 | 389,881 (+3%) |
| Target Bonus (% of Base) | 65% | 70% (increased effective Jan 1, 2024) |
| Actual Annual Cash Bonus ($) | 262,772 | 236,619 |
Performance Compensation
Annual Incentive Plan – Design and Payouts
| Year | Metric | Weight | Target | Actual/Attainment | Payout vs Target |
|---|---|---|---|---|---|
| 2024 | Adjusted EBITDA | 60% | $355M plan | 98% of target (Committee-adjusted to $348M) | 95% |
| 2024 | Free Cash Flow | 25% | $130M plan | 74% of target ($96M) | 58% |
| 2024 | Safety | 10% | Goal-based | 108% | 108% |
| 2024 | Environmental | 5% | Goal-based | 90% | 90% |
| 2023 | Adjusted EBITDA | 60% | $285M plan | 101% of target ($289M) | 108% |
| 2023 | Free Cash Flow | 25% | $100M plan | 109% of target ($109M) | 112% |
| 2023 | Safety | 10% | Goal-based | 96% | 96% |
| 2023 | Environmental | 5% | Goal-based | 90% | 90% |
Long-Term Incentives – Structure and Results
- Vehicle mix: 50% service-based RSUs (3-year cliff vest); 50% performance units (PUs) paid in cash after 3-year performance period .
- 2024–2026 Performance Units (granted Feb 23, 2024):
- Metrics: Cumulative Adjusted EBITDA (70%) and Relative TSR vs peer group (30%) .
- Goal grid: Cumulative Adj. EBITDA threshold $852M / target $1,065M / max $1,598M; Relative TSR 30th / 50th / >90th percentile; payout 0–200% of target, TSR capped at target if absolute TSR negative .
- 2022–2024 Performance Units (paid Feb 2025):
- Results: Cumulative Adj. EBITDA $867M; Relative TSR 67th percentile; Overall payout 137% of target .
- Childress’s non-equity incentive line includes this PSU cash payout .
Childress-Specific 2024 and 2023 LTI Targets
| Year | Target LTI (% of Salary) | Target RSU $ | RSU Shares | Target PU $ |
|---|---|---|---|---|
| 2024 | 130% (up from 125%) | $253,423 | 12,184 | $253,422 |
| 2023 | 125% | $236,578 | 11,462 | $236,578 |
Vesting: RSUs settle in shares at 3rd anniversary; PUs settle in cash after the 3-year period (with special vesting on death/disability/CoC as described below) .
Equity Ownership & Alignment
| Date | Shares Owned | RSUs Unvested/Credited | Total “Beneficial + RSUs” | Notes |
|---|---|---|---|---|
| Mar 17, 2025 | 28,452 | 34,338 | 62,790 | Each director/executive ≤0.7% of outstanding . |
| Mar 20, 2024 | 36,054 | 36,373 | 72,427 | Each director/executive ≤0.6% of outstanding . |
Additional alignment policies:
- Stock ownership guidelines: 5x CEO salary; 3x for President/COO/Corporate SVPs; 2x for other SVPs; 5x director retainer. Vested and unvested RSUs count; 5-year compliance window .
- Hedging/pledging prohibited for directors and officers .
- No stock options outstanding for NEOs; company has not used annual stock options since 2006 .
Employment Terms
- Change-of-control protection: Childress participates in the CoC Plan (adopted 2018). On a termination without cause or for good reason in connection with a change of control (double-trigger), lump sum equals 2x (highest base salary + target annual bonus) plus one year of post-employment health benefits (COBRA premium); “net better of” provision for excise tax mitigation .
- Equity treatment on termination/CoC:
- Death or disability: unvested RSUs vest; PUs vest at target value .
- Change of control: PUs deemed earned at target but generally remain subject to continued service to original vest date; upon qualifying termination, for CoC Plan participants (like Childress) PUs vest at target ($100/unit) .
- Illustrative potential payments (as of Dec 31, 2024): Involuntary termination w/o CoC: $194,941 cash severance + $1,688 COBRA subsidy; Death/Disability: RSUs $948,608; PUs $754,600; SERP vested $396,682 + unvested $128,524; CoC+Termination: cash $1,345,854; COBRA $13,407; RSUs $948,608; PUs $754,600; SERP vested $396,682 + unvested $128,524 .
Additional Compensation & Benefits Details
- SERP (nonqualified deferred compensation): Company credits equal to 20% of base salary for Childress; 2024 company contribution $77,976; 2024 aggregate balance $525,206; hypothetical 2024 earnings $42,194 .
- Perquisites (2024): Excess liability insurance, supplemental medical plan, use of sporting event tickets, club membership; 2024 perqs total $31,960 .
Say-on-Pay, Program Governance, and Peer Group
- Say-on-pay support: ~94% (2024 vote referenced for 2025 compensation decisions); ~93% the prior year .
- Compensation Consultant: Meridian Compensation Partners (independent; retained since 2015) .
- 2024 Peer Group: ChampionX, Chart Industries, Dril-Quip, Expro, Flowserve, Helix Energy Solutions, Helmerich & Payne, Noble, NOW (DNOW), Oil States International, Transocean, Weatherford .
Performance & Track Record
- 2024 Outcomes: Revenue $2.7B (+10% YoY), operating income $246M (+36%), net income $147M (+51%), Adjusted EBITDA $347M (+20%); 6th consecutive year of growth .
- Capital returns and equity: Repurchased 825,427 shares ($20M); share price rose from $21.28 (Dec 29, 2023) to $26.08 (Dec 31, 2024) .
- Long-term: 3-year TSR of 142% (used in pay vs performance/PSU disclosures) .
- Segment highlights include manufactured products backlog $604M YE 2024 providing visibility .
Compensation Structure Analysis
- At-risk mix: For non-CEO NEOs, 66–79% of total direct compensation at risk (target) in 2024; long-term incentives ~50% performance-based (PUs) and ~50% RSUs .
- Shift/increases: Childress LTI target raised from 125% to 130% of salary in 2024 based on benchmarking; AIP target increased from 65% to 70% of salary in 2024 .
- Clawback: SEC/NYSE-compliant policy approved Aug 2023; 3-year lookback on restatements .
- Risk controls: Caps on payouts; TSR component capped at target if absolute TSR negative; hedging/pledging prohibited .
Equity Grant and Vesting Schedule (Selected)
| Unvested RSUs as of Dec 31, 2024 | 2022 Grant (delivers 2/25/2025) | 2023 Grant (delivers 2/24/2026) | 2024 Grant (delivers 2/23/2027) | Total |
|---|---|---|---|---|
| Earl F. Childress | 12,727 | 11,462 | 12,184 | 36,373 |
Vesting: RSUs vest fully on the third anniversary of grant; withholding applies for taxes; PUs vest based on 3-year performance and are cash-settled .
Compliance & Related Matters
- Section 16 compliance: 2023 filings generally timely; one Form 4 for another officer (McDonald) reported late (no issue noted for Childress) .
- Related party transactions: No disclosed related-party transactions involving Childress in 2023 .
Investment Implications
- Pay-for-performance alignment is strong: company-level metrics (Adj. EBITDA, FCF, safety, ESG) drive annual bonuses; long-term PSUs tied to cumulative Adj. EBITDA (70%) and relative TSR (30%); TSR capped in down markets—mitigates windfalls .
- Retention risk moderated by multi-year RSU/PU vesting and competitive LTI target (130% of salary); CoC protection is double-trigger at 2x, which is market-standard and limits single-trigger concerns .
- Alignment safeguards: robust stock ownership guidelines; prohibition on hedging/pledging reduces misalignment/forced selling risk; no options outstanding reduces incentives for repricing behavior .
- Performance momentum (EBITDA growth, higher profitability, backlog) plus 3-year TSR of 142% underpin incentive payouts; continued delivery on FCF targets is critical given 2024 FCF under plan (74% of target) which reduced cash bonus payout—signals discipline in payout calibration .